The Art Of Fractional Investment

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Fractional investing has gone from strength to strength in the last few years, not least because of the retail investment boom of 2020. The pandemic-induced dip was, after all, the perfect excuse to get into once out-of-reach megastars like Alphabet, Tesla and Meta.  

But stocks are just the tip of the iceberg: you can invest in a massive variety of alternative assets too, offering the unique chance to buy into passion projects and left-field markets. So we’ve taken a look at just a few of the opportunities open to you, from promising newcomers to the downright bizarre.

For sports fans

What better way to remember the time your team scored a – checks notes – home run than with some of the rarest sports memorabilia going. Jerseys, mitts, trading cards, ticket stubs – you name it.  

Sports card and memorabilia prices were firing on all cylinders in 2020 and 2021. That much is clear from the sale of a mint condition 1953 Mickey Mantle trading card, which jumped from a $2.5 million initial public offering in September 2020 to a $3.1 million sale in July 2021. And since sports investing platform Collectable had fractionalised the card into 40,000 shares, a swell of retail investors benefited from the 24% return.

But 2022 took no prisoners, and sports memorabilia was as much a victim of the economic downturn as the stock market:

In fact, 91 of the 215 assets on Collectable’s platform as of Sports Collectors Daily’s latest survey were trading at less than half of their IPO value, with the rest either generating less severe negative returns or staying flat. That doesn’t suggest the market – which lacks the inflation-proof track record of real estate and art investment – is in particularly good shape, and cost-of-living crises around the world imply it’s not going to get better anytime soon.

For property moguls

It’s ironic that investing in real estate is now easier than ever, even as the housing market becomes more and more inaccessible for the average person. Ironic, too, that the more out-of-reach bricks and mortar becomes, the more you stand to gain from a fractional investment in the space.  

Now, there’s so much variety in the real estate market that it’s tricky to make sweeping statements about its performance. But to take one small drop in an expansive ocean, there have been signs of a slowdown in the UK lately, with the average house price falling for a fifth month in a row in January. And Bloomberg thinks European property more broadly is heading towards collapse, as potential recession pushes up debt costs and puts pressure on investment.  

Still, there are a couple of things to keep in mind here. Firstly, real estate – like art – tends to keep moving in a steady uptrend as the population grows over the long term, so you could still profit from fractional investments in the space if you’re patient (and selective). Secondly, no one said you had to confine yourself to commercial and residential real estate anyway. Vacation homes on fractional platform Here have collectively returned 45% since launch, while carrot and alfalfa farmland in California generates investors around 16% a year. You could even invest in an island, if you felt so inclined.  

Real estate investments aren’t limited to bricks, soil and sand either: metaverse platforms like Decentraland offer you the chance to buy and build on your very own land, with a 1,100 square foot plot in the virtual world having reportedly gone for over $200,000 a few years back. And wherever big money is involved, fractionalisation isn’t far behind: Futurent can help you get on the digital property ladder, for better or worse.

For fashionistas  

If you have sophisticated tastes, look no further than fractional investing platforms that securitise luxury products, from Hermès bags to jewellery. The market’s success stories arguably make doing so a tempting proposition: a Belperron amethyst cuff sold for around $29,000 in 2003, only to go for almost $88,000 in 2021.

But that pales in comparison to the growth we’ve seen in the sneaker market. In 2017, you could’ve got your hands on the pair of Converse that Michael Jordan wore at the 1984 Olympics for the mere price of $190,000. In 2020, though, you’d have needed $615,000 to net a pair of his Air Jordan 1s. It gets crazier: Kanye West’s prototype Nike x Yeezys sold privately for $1.8 million in 2021, making them the most expensive sneakers ever.  

Second-hand sneakers – celeb-worn or otherwise – have become a massive market, which is expected to go from an estimated $10 billion today to nearly $30 billion by the end of the decade. That promises a high-return alternative investment in theory, but you might want to tread carefully: not only does the market lack a long track record that proves its mettle in recessionary times, it’s also growing faster than the infrastructure needed to verify the products. So where the art market has institutional checks and balances in place to weed out the fakes, that’s not necessarily the case with sneakers, which could erode confidence in the market going forward.  

For big kids

Nostalgia is a powerful thing: you only need to look at the decades-in-waiting sequels and reboots to see as much. And until recently, that made a thriving market of toys, Pokémon cards and video games and comic books.  

Take trading cards, which, according to Card Ladder, jumped 75% a year between November 2016 and April 2020, and 500% between April 2020 and March 2021 alone. So far, so good. Trouble is, the market had slipped 40% from those March highs by October. Just something to bear in mind before you go investing in a $184,000 Charizard.

Comic books are a different beast: they had a relentless 2021 in which eight comics sold for more than $1 million, and went one better in 2022 with nine sales of that size. That included the most expensive comic book ever in the form of Superman No. 1, which went for a cool $5.3 million in a private sale. And while the market tailed off in the latter half of last year, it’s arguably just correcting a little after a pretty stunning couple of years.  

For creative types

You might not have a musical bone in your body, but you don’t need one when you can ride the coattails of superstars.

It’s becoming increasingly popular for musicians to sell their record catalogues, with Justin Bieber’s $200 million sale the most recent example. And multiple platforms are taking advantage, enabling investors to earn a steady income from royalties or sell on their shares to benefit from a band’s rise through the charts. The model has been proven by Korean fractional music platform Musicow, which debuted shares in K-Pop band SG Wannabe for the equivalent of around £8. When the band’s star started to climb in April 2021, that hit as much as £112.

Art is dancing to the same beat. Fractional art investment is a growing segment of the market: ArtTactic calculated that over $625 million of art has been sold fractionally since 2017, with 34.2% of that coming in 2022 alone. Now, fractional art investing is our raison d'être at Mintus, so it stands to reason that we’d be big fans. But the numbers don’t lie: the art market had a great 2022, with a record $7.5 billion worth of total auction sales of Old Masters, Impressionist, Modern, Post-War and Contemporary Art at Sotheby’s, Christie’s and Phillips. That props up the truism that art is a safe haven in times of economic uncertainty, and suggests that high-quality artworks are still a good long-term investment.

Then again, if it’s a really long-term investment you’re after, you could always just fractionally invest in a dinosaur skull. That one’s been on the market for around 68 million years…

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